Proposed Amendment to the South Dakota Constitution to Enact the Core GRT Plan

Article XIII – Taxation and Finance

Section 1. Establishment of the Core Gross Receipts Tax (GRT) Plan
Upon the effective date of this amendment, all existing state taxes, including but not limited to sales taxes, property taxes, and other state-level fees, shall be repealed and replaced with a single Gross Receipts Tax (GRT). The GRT shall be levied at a rate of 5% on all gross business revenue generated within the State of South Dakota, estimated at $72 billion annually, to generate approximately $3.6 billion in state revenue.

Section 2. Elimination of Property Taxes
All property taxes imposed by the state, counties, municipalities, or any other taxing authority within South Dakota shall be eliminated, resulting in an estimated savings of $1.6 billion annually for South Dakota residents. No new property taxes may be imposed unless this amendment is repealed by a subsequent constitutional amendment approved by a majority vote of the people.

Section 3. Establishment of the South Dakota Department of Government Efficiency (SD-DOGE)
A new independent agency, the South Dakota Department of Government Efficiency (SD-DOGE), shall be established to oversee the collection, distribution, and management of GRT revenue. SD-DOGE shall:

• Conduct annual audits of all state and local government spending to ensure transparency.
• Enforce Zero-Based Budgeting (ZBB), requiring all government entities to justify expenditures annually.
• Publish public reports detailing revenue collection, expenditure allocations, and audit findings, accessible online for citizen review.
• Include a citizen oversight committee to provide input and ensure accountability.

Section 4. Safeguards for Essential Services and Exemptions
The GRT revenue shall be allocated as follows to protect essential services and provide exemptions:

• Education Funding: A minimum of $960 million annually shall be allocated to public schools, ensuring no reductions in funding, with rural districts like Harding County receiving their proportional share (e.g., $1.73 million).
• First Responders: An estimated $215 million annually shall be dedicated to first responders, with local governments receiving $1.5 billion to support fire, police, and emergency services (e.g., $31 million for Pennington County).
• Military and Veteran Exemptions: Active-duty military families shall be 100% exempt from the GRT on their businesses, costing $4.78 million annually. Veteran-owned businesses with annual revenue up to $200,000 shall be exempt, costing $21.75 million.
• Other Exemptions: Small businesses with annual revenue under $100,000 and senior-owned businesses up to $150,000 shall be exempt, costing $5.97 million, ensuring fairness across income levels.
• Revenue Surplus: A $95.8 million annual surplus shall be maintained as a buffer to protect against economic downturns, ensuring funding stability for essential services.

Section 5. Local Control and Accountability
GRT funds shall be collected and managed locally by counties and municipalities, preserving full local autonomy. Local governments shall:

• Retain control over expenditure decisions, ensuring funds meet community needs.
• Implement Zero-Based Budgeting as mandated by SD-DOGE to prevent overspending.
• Be subject to annual audits by SD-DOGE, with results publicly reported to ensure transparency and accountability.

Section 6. Effective Date and Implementation
This amendment shall take effect immediately upon approval by a simple majority (50% + 1) of votes in the November 2026 general election. The South Dakota Department of Revenue, in coordination with SD-DOGE, shall implement the GRT collection process, with quarterly filings via an online portal commencing no later than January 1, 2027.

Section 7. Severability
If any provision of this amendment is found to be unconstitutional or invalid, the remaining provisions shall remain in full force and effect, ensuring the Core GRT Plan’s implementation to the greatest extent possible.